FILOMENA CUSTODIO, ET AL., PETITIONERS, VS. FILOMENA CASIANO, ET AL., RESPONDENTS.

Filomena Custodio, et al., who are
the children of Alejandra, Gregoria and Trinidad, all surnained Custodio, filed
on October 7, 1953 a complaint before the Court of First Instance of Cavite
against Filomena Casiano, et al., the widow and children, respectively, of
Ciriaco Custodio, alleging, among other things, that their grandfather, Isaac
Custodio, purchased during his lifetime for a valuable consideration but on
installment basis from the Caridad Estate of Cavite, Inc. a parcel of land
situated in the City of Cavite, which is more particularly described in
paragraph 3 of the complaint; that although the title to the land was not
placed in the name of Isaac before he died on April 15, 1927, due to his
inability to pay in full the purchase price, his rights thereto passed to his
children, namely, Ciriaco, Alejandra, Gregoria, and Trinidad, in the proportion
of 1/4 each; that upon payment by Alejandra of the remaining installments, the
Caridad Estate of Cavite, Inc. suggested that the deed of sale be executed in
the name of their brother Ciriaco since he was the only male in the family, and
having the three sisters agreed to the suggestion, the document was executed as
suggested and, pursuant thereto, Transfer Certificate of Title No. 5800
covering the land was issued in the name of Ciriaco Custodio, married to
Filomena Casiano; and that having discovered later that defendants were
intending to sell the land to the prejudice of the plaintiffs, the latter
instituted the present action.

In the answer they filed after
their motion to dismiss was denied, defendants averred that they are the sole
and exclusive owners of the land since the same was purchased by their
predecessor-in-interest Ciriaco Custodio from the Caridad Estate of Cavite,
Inc. as a result of which Transfer Certificate of Title No. 5800 was issued in
his name. And as a special defense, defendants contend that the land having
been registered under the Land Registration Act (Act 496) the title issued in
relation thereto is conclusive as to all matters contained therein, aside from
the fact that the cause of action of plaintiffs, if any they have against
defendants, has already prescribed.

After trial, the court a quorendered judgment declaring plaintiffs and defendants, with the exception of
Isagani Geronimo, Filomena Casiano and Sixto Brasero, co-owners of the land in
litigation, and ordering the cancellation of Transfer Certificate of Title No.
5800 and the issuance of another in their names in the proportion therein
specified, with costs against defendants.

Dissatisfied with this decision,
defendants appealed to the Court of Appeals which, on September 8, 1961,
rendered judgment declaring defendants the sole and exclusive owners of the
land described in Transfer Certificate of Title No. 5800. Hence the present
petition for review.

In reversing the decision of the
court a quo, the Court of Appeals based its ruling on the theory that since no
trust relation was proven between the predecessors-in-interest of both
petitioners and respondents, or that they were co-owners of the land in
question, for as a matter of fact the land appears registered in the name of
Ciriaco Custodio, coupled with the fact that petitioners filed the instant
action only after the lapse of 25 years from the date of the registration of
the land in Ciriaco’s name, the right of action of petitioners has already
prescribed. This ruling is now assigned as error.

We find merit in this petition for
review. An examination of the evidence on record will clearly reveal that the
land in question was formerly a part of a big estate known as “Hacienda
Dona Bartola” which the Caridad Estate of Cavite, Inc. bought in 1921.
This hacienda was later sub- divided into small lots for resale to the public
giving preference to actual occupants. Isaac Custodio was the occupant of the
land in question he being the lessee of its former owner. Taking advantage of
the offer given by the owner to the occupants, Isaac bought the land he was
occupying for P800.00 in 1922, making as down payment the value of the shares
he was holding with the corporation worth P600,00. When Isaac died on April 15,
1927, the title has not yet been issued to him in view of his inability to pay
the purchase price in full, but the-balance of P60.00 was advanced by his
daughter Alexandra. Upon the payment of this balance, the manager of the
corporation suggested that since Ciriaco was the only male in the family it
would be convenient that the title be issued in his name, to which his three
sisters agreed. But this notwithstanding after the registration of the title in
the name of Ciriaco in 1928, his sister took possession of the land, with the
exception of Ciriaco who was never in possession thereof. It further appears
that, although the title of the land was issued in the name of Ciriaco the same
however was at all times kept in the possession of Alejandra, and later of
Valeriano, an uncle of plaintiffs, and it was only in 1951 when the title was
given to Filomena Casiano who had requested for it in connection with a
transaction. It finally appears that during the lifetime of Ciriaco the latter
had always acknowledged the ownership of his sisters over the land and after
his death his widow had also acknowledged on several occasions that the
predecessors-in-interest of the parties were co-owners of the land.

Contrary to the above facts
respondents were not able to advance any proof justifying the purchase by
Ciriaco of the property in question other than the mere fact that the title was
issued in his name, but of course this stand cannot be sustained for it appears
sufficiently refuted by convincing evidence on record. It is significant to
note that respondents at first claimed that the property was bought by Ciriaco
directly from the Caridad Estate of Cavite, Inc., but when confronted by
evidence showing that it was originally bought by Isaac Custodio, they later
insinuated that it was only given to him by Isaac out of gratitude for services
he rendered to his father. This inconsistent stand cannot but lend cogency to
the claim of petitioners that the title to the land was issued in the name of
Ciriaco merely with the understanding that he would act as a trustee of his
sisters. There being, therefore, a relation of co-ownership between the
predecessors-in-interest of the parties herein, it follows that the right of
petitioners to bring the present action cannot be deemed barred by
prescription:

“Under the foregoing facts it
is evident, and it must be so declared, that, when the defendant procured the
registration of this land in his own name, he was acting in a trust capacity
and as representative of all of his brothers and sisters. As a consequence he
is now holding” the registered title thereto in a trust capacity, and it
is proper for the court to declare that the plaintiff are entitled to their
several pro rata shares, notwithstanding’ the fact that the certificate of
registration is in the name of the defendant alone.” (Castro, vs. Castro, 57
Phil., 675)

“* * * it is averred in the
complaint that that patent was applied for by Luis Mabana pursuant to aft
agreement entered into between him and his co-heirs that he should put the
title in his name subject to the condition that he was merely to act as a
trustee of Ms co-heirs. In other words, it was their understanding that while a
title was to be issued in the name of Luis Mabana, a partition, of the property
would later be effected between him and his co-heirs. This Luis Mabana failed
to do, and when the property as appropriated by his heirs, the present action
was instituted. There is therefore the relation of trust between Luis Mabana
and his co-heirs which gives to the latter the right to recover their share in
the property unimpaired by the defense of prescription.” (Mabana vs.
Mendoza, et al., 105 Phil., 260)

The contention that petitioners
cannot bring the instant action because of laches cannot be sustained. In order
that this defense may be invoked, the following requisites must be present; (1)
conduct on the part of the defendant giving rise to the situation for which
plaintiff seeks a remedy; (2) delay in asserting complainant’s rights after he
had knowledge of the defendant’s conduct and after he have had an opportunity
to take action; (3) lack of knowledge on the part of the defendant that the
complainant would assert the right on which he bases his suit; and (4) injury
or prejudice to the defendant in the event relief is accorded to the
complainant.^[1]

The elements abovementioned are not
here present, with the exception probably of the first one where we stated that
because of the conduct of respondents in requesting for the delivery of the
title, petitioners were prompted to institute the present action. But not with
regard to the rest. It appears that petitioners did not lose time in asserting
their right when they came to know of the conduct of respondents as regards
their design to take advantage of the property. Neither can respondents claim
lack of knowledge that petitioners would someday assert their right for they
knew right along that their predecessors-in-interest was merely a trustee of
his other co-heirs. And respondents cannot finally invoke prejudice on their
part in the event relief is accorded to petitioners for that is the consequence
they should naturally expect from the relation of trust that existed between
their predecessor-in-interest and his co-heirs. As a consequence, respondents
cannot invoke the defense of laches.

Wherefore, the decision appealed from is
reversed. The decision of the court a quo dated April 2, 1956 is hereby
revived. No costs.

Padilla, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala and Makalintal, JJ.,
concur.

^[1] Go Chi Gun, et al., vs. Co Gho, et
al., L-5208, February 28, 1955; Concordia Mejia de Lucas vs. Gamponia, L-9335;
October 31, 1956; Vergara .vs. Vergara, L-17524, May 18, 1962